Mid-America Apartment Communities (NYSE:MAA) and Essex Property Trust (NYSE:ESS) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Mid-America Apartment Communities and Essex Property Trust, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Mid-America Apartment Communities | 0 | 5 | 6 | 0 | 2.55 |
| Essex Property Trust | 2 | 8 | 6 | 0 | 2.25 |
Mid-America Apartment Communities presently has a consensus price target of $133.00, indicating a potential upside of 18.38%. Essex Property Trust has a consensus price target of $291.3077, indicating a potential upside of 29.53%. Given Essex Property Trust's higher possible upside, analysts plainly believe Essex Property Trust is more favorable than Mid-America Apartment Communities.
Valuation and Earnings
This table compares Mid-America Apartment Communities and Essex Property Trust's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Mid-America Apartment Communities | $1.64 billion | 7.83 | $353.81 million | $6.55 | 17.15 |
| Essex Property Trust | $1.46 billion | 10.08 | $439.29 million | $13.38 | 16.81 |
Essex Property Trust has lower revenue, but higher earnings than Mid-America Apartment Communities. Essex Property Trust is trading at a lower price-to-earnings ratio than Mid-America Apartment Communities, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Mid-America Apartment Communities and Essex Property Trust's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Mid-America Apartment Communities | 19.66% | 5.33% | 2.97% |
| Essex Property Trust | 42.47% | 9.94% | 4.90% |
Risk and Volatility
Mid-America Apartment Communities has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Essex Property Trust has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.
Institutional and Insider Ownership
92.2% of Mid-America Apartment Communities shares are owned by institutional investors. Comparatively, 94.5% of Essex Property Trust shares are owned by institutional investors. 1.3% of Mid-America Apartment Communities shares are owned by company insiders. Comparatively, 3.5% of Essex Property Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Dividends
Mid-America Apartment Communities pays an annual dividend of $4.00 per share and has a dividend yield of 3.6%. Essex Property Trust pays an annual dividend of $8.31 per share and has a dividend yield of 3.7%. Mid-America Apartment Communities pays out 61.1% of its earnings in the form of a dividend. Essex Property Trust pays out 62.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Mid-America Apartment Communities has raised its dividend for 9 consecutive years and Essex Property Trust has raised its dividend for 26 consecutive years. Essex Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Essex Property Trust beats Mid-America Apartment Communities on 11 of the 16 factors compared between the two stocks.
